Question

Adrianne invested $2000 in an account at a 3.5% interest rate compounded annually. She made
no deposits or withdrawals on the account for 4 years. Determine, to the nearest dollar, the
balance in the account after the 4 years.

Answer 1

With the information given, you can make the expression 2000*3.5%*4, because the interest in a year is 3.5% of 2000 and it goes for four years.

Change 3.5% to 0.035:

2000*0.035*4

Multiply:

70*4

280

To find the total balance, add 2,000 to the amount of interest earned, 280.

2000+280=2280.

Therefore, after the 4 years pass, the account balance is $2280.